While public school districts received an unprecedented influx of federal taxpayer funds in the wake of the coronavirus pandemic that ultimately exceeded their actual needs, teachers unions and some education officials are calling for urgent It is requesting more federal funding to maintain the budget increase indefinitely. Beginning in March 2020, Congress has appropriated nearly $190 billion across three federal appropriations.reference New spending on K-12 schools, largest infusion of federal education fundingreference in the history of the United States. This $190 billion is in addition to the regular federal spending that public school districts receive, far less than their typical (pre-pandemic) annual spending of about $70 billion.reference
The last of three rounds of federal COVID-19 spending was from March 2021 under the American Rescue Plan (ARP) Act. Many argue the district didn’t need the last bit of federal spending.reference Despite this, pressure from public school facilities, etc.reference With pandemic-era funding drying up and public school districts facing a “fiscal cliff,” the public is once again looking for a new influx of taxpayers.reference In fact, the district’s schools are better funded than ever before. Rather than continue this surge in federal spending, school districts should halt the ongoing staffing surge and better prioritize existing resources.
background
The first two waves of Elementary and Secondary School Emergency Relief (ESSER) spending – $13 billion for ESSER I (Coronavirus Aid, Relief, and Economic Security (CARES) Act) and $540 billion for ESSER II (Coronavirus Response and Relief Supplemental Act). Billion dollars (CRSA)reference—Already expired, ARP ESSER funds are scheduled to be depleted by the end of January 2025. School districts can apply for an extension to extend the spending deadline until the end of March 2026. The ARP Act specifically allocated approximately $130 billion to K. – 12 schools, nearly double the U.S. Department of Education’s discretionary budget.reference School districts must disburse ARP ESSER funds by the end of September 2024 or risk having the funds forfeited to the U.S. Treasury.
All ESSER funds were required to be disbursed by September 30, 2024, but a significant portion of these funds remains unused. nearly $26 billionreference ESSER funds (ESSER I, ESSER II, ARP ESSER) remain unused, with 10 states holding at least one-fifthreference of their assignments. Only 64 percent in the District of Columbiareference of funds were used, with Maryland and Nebraska spending nearly 30%.reference of funds remain unused.
Federal funds allocated during the pandemic were always intended for temporary, one-time expenditures to address the additional costs of remote learning, health and safety measures, and learning recovery programs. Congress shouldn’t worry too much about the so-called “fiscal cliff” that some school districts are warning about, especially since many states still have significant spending left to spend. In response to these concerns, some members of the U.S. House of Representatives are co-sponsoring a bill to continue the K-12 emergency aid money that has been flowing to schools across the country.reference For example, Rep. Ilhan Omar (D-Minn.) recently said, “We can’t afford to restore funding to pre-pandemic levels. We know that more funding for schools improves academic performance.”
This issue brief explains five reasons why this concern about the “fiscal cliff” is misplaced.
1. Increase in property tax base. From March 2020 to August 2024, the median home price increased by 25%.reference And rents rose 24%.reference Given that local property taxes are the primary source of funding for most school districts, a higher property tax base from residential and commercial real estate provides more than typical local revenue to support school districts. Masu. Additionally, commercial real estate values have increased by more than 3% this year.reference This increase in revenue from property taxes could increase funding for schools and dampen calls for continued increases in federal spending. Rising home prices also lead to a stronger and more resilient local tax base, allowing school districts to absorb fiscal challenges without the need for additional federal or state funding. These local funds will likely increase even more as most public school districts have seen significant enrollment declines since 2019.reference
2. Healthy pre-pandemic stockpiles. Many school districts also set aside reserves before the pandemic to protect against economic downturns and financial difficulties. These reserves were designed to provide a cushion during difficult times, so districts entered the pandemic relatively well-equipped to deal with temporary financial disruptions. For example, the unused year-end fund balance per student (adjusted for inflation and not applied to capital or debt service) was $4,111 in 2020, compared to $2,976 in 2007.reference In Pennsylvania, school districts stockpiled cash to weather the economic downturn and entered the pandemic “with more than $4.5 billion in reserve funds.”reference Their rainy day fund has also increased by 145% since 2006.reference
3. School districts may further inflate their reserve funds. Thanks to the ESSER Fund, school districts across the country have been able to “combine remaining funds into comprehensive infrastructure projects to reduce costs and stabilize budgets for years to come.”reference For infrastructure projects, such as building maintenance and hardware and software purchases, the district will be responsible for these costs now or in the future, and using ESSER funds for these purposes will reduce costs that would otherwise be paid. We can increase our reserves with state and local funds that we wouldn’t otherwise have. Required for these purchases. These projects also have the potential to improve efficiency and reduce future operating expenses. This means that districts are not only increasing their reserve funds, but also preparing for a more financially stable future. A school district in Missouri completed a “Comprehensive Facilities Enhancement Project” using ESSER funds. The project modernized HVAC equipment at four district facilities, saving approximately $4 million over 15 years.reference
Additionally, federal lawmakers have given states and school districts more flexibility in how they use their allocated federal pandemic funds. The CARES Act, for example, allowed “schools to save even more federal spending for children from low-income families through next year,” and waived some “restrictions on the purchase of learning technology,” among other things.reference This flexibility allows school leaders to use taxpayer resources more imaginatively, adapt to changing circumstances, and prepare for the future without increased federal funding.
4. A decades-long surge in civil service employment. The number of employees employed in public schools across the United States has increased significantly over the past 70 years. This increase in staff numbers is primarily comprised of non-teaching staff, such as administrative, support, and professional staff, and exceeds both the increase in student numbers and the increase in classroom teachers. According to the National Center for Education Statistics (NCES), in just the last few decades, from fall 1990 to fall 2019, the number of school district administrators increased by 141%, compared to “all other employees who are not administrators or teachers.” ‘ increased by 141%. ) increased by 63 percent.reference These increases occurred between a 33 percent increase in teachers and a 23 percent increase in students.reference Adding up all of these headcount increases, the total number of employees employed in public school districts will increase by 49%, more than double the increase in student numbers.
This significant increase in administrative and support roles has raised concerns about inefficient spending and increased bureaucracy within public schools. School leaders should optimize existing resources and streamline operations by eliminating nonessential positions or considering downsizing, especially administrative roles that have increased disproportionately over time. . This can be done without impacting student outcomes, as staff increases relate to administrative and support roles rather than direct instructional staff such as teachers.reference
At least early in the pandemic, public school districts prioritized hiring teachers. NCES datareference Additionally, between fall 2019 and fall 2021, the number of district administrators decreased by 6 percent, the number of “all other employees” decreased by 2 percent, the number of students decreased by 2.7 percent, and the number of teachers decreased by .5 percent. It also shows a percentage increase. This means public school districts had fewer teachers per 100 students in fall 2021 than in fall 2019, but significantly more than in fall 1990.
Over time, many school districts began using ESSER funds to hire additional staff, permanently increasing their overall operating costs.reference From fall 2021 to fall 2022, the district added more than 160,000 people.reference Therefore, staffing levels in fall 2022 were more than 100,000 people higher than in fall 2019.reference These funds were not intended to sustain long-term headcount growth. Some school districts may need to reevaluate whether they need to maintain similar staffing levels as ESSER spending deadlines approach and student enrollment declines. yeah.
5. States are well-funded. Many states are flush with cash thanks to economic growth during the COVID-19 pandemic and federal stimulus support. According to the National Association of State Budget Officers (NASBO), state rainy day funds “reached a record $164 billion in fiscal year 2022.”reference Additionally, NASBO reports:
Thirty-three states plan to further increase the size of their 2024 Rainy Day Fund balances. The median rainy day fund balance as a percentage of expenditures is expected to increase from 12.3 percent in fiscal year 2023 to 13.2 percent in fiscal year 2023. It was 15.0% in the 2024 budget proposal and 15.0% in the 2025 budget proposal.reference
This means states need to be able to weather a potential economic downturn and confidently fund K-12 education spending, one of the largest spending categories in state budgets.
conclusion
Concerns about an impending “fiscal cliff” for public school districts are misplaced as federal ESSER funding approaches its expiration date. Many states have not been able to take full advantage of the large amounts of federal aid provided during the pandemic. At the same time, they have strengthened their savings, completed long-term projects and benefited from rising home values. Most state budgets are cash-rich, with record-setting funding available and well-positioned to absorb future fiscal challenges. Districts also have an opportunity to streamline non-essential administrative roles and optimize existing resources for students and teachers, especially given that most districts serve fewer students. In this post-pandemic environment, school districts are well-equipped to maintain fiscal stability without additional federal taxpayer spending.
Madison Marino Doan is a senior fellow at the Heritage Foundation’s Education Policy Center. Dr. Benjamin Scafidi is a professor of economics and director of the Center for the Economics of Education at Kennesaw State University.
